Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

E-mini S&P500 Analysis

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Chart Analysis

Yesterday the market closed down. In the DAILY ESH15 chart below we are examining the market distance to the first valid LONG support (2032.75) and to the SHORT resistance level (2071.75) that has odds of reversal equal to those of the first valid LONG support. As you can see the LONG support has almost been reached yesterday and may still be reached today as it is only a few points away. On the uptrend side the market has definitely room to go, so as always let’s try to imagine that the market is like a coil compressing in the LONG direction and then bouncing back and then compressing in the SHORT direction and then pulling back and we must be ready to capture profits on these swings.

The latest Higher High (circled in black on the right hand side of the chart below) is also giving us a clear indication that the market is trying to breakout higher, so the process anticipated in the last few days is currently happening and we have to see if from here the market finally pushes higher and breaks definitively out of its latest sideways move.

One of our clients yesterday sent an email to us, where he asked: “What happens to your LONG strategy if a war suddenly breaks out in Russia/Ukraine ?”. Unfortunately we can’t see into the future and it is not possible to estimate what will happen for each global geopolitical event that may affect the stock market. We use quantitative models to avoid the futile exercise of trying to predict the future through fundamental/geopolitical analysis, our models allow us to anticipate market reversals before the news are out, so we can only say that if the market tanks because of a war in Ukraine we will need to look at the TO GO LONG levels and find a good place to enter at discounted prices. The market will bounce back, as always, when that specific geopolitical situation improves and we will be already LONG before the news can tell the world that things are resolving in Ukraine.
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The Financialized Economy

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This segment is excerpted from this week’s Notes From the Rabbit Hole, NFTRH 329, and was originally titled…

Does the US Economy and Stock Market Need Manufacturing?

The ISM PMI reports for December and January showed deceleration in line with our view that a persistently strong US dollar would begin to eat away at US manufacturing, exporters and other companies that depend on significant foreign business. But in an age where investors will bid up Twitter* (with its forward P/E of 141 and 30B market cap to 1.2B revenue) by 16% in a day, are we returning to the old days of ‘PE’s don’t matter’ with the hook or tout being ‘it’s all about ad revenue’?

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